The Ho norab le Michae l H. Watson, United States District Judg e for the S outhern D istrict of Ohio , * sittingby des ignation. NO T RE CO M M E ND E D F OR F UL L - T E X T P UB L I CA T I ON

Fi l e N ame: 09a0195n. 06 Fi l ed: M ar ch 12, 2009 N o. 08- 1174 UNI TED S TATES CO URT O F AP PEALS F O R T H E S IX T H C IR C U IT
AS S UR ANC E CO M P ANY OF AM E RI CA , Pl ai nt i ff- A ppel l ee,
v. L AVDAS J E WEL RY , L T D, D e f e n d a n t-A p p e llan t. O n A ppeal fr om t he U ni t ed St at es D i s t r i ctC our tfort he E as t ern D i s t r i ctof M i chi gan a t D e tro it

/ B ef ore: G U Y and G R I F F I N , C i rcui t Judges; W A T SO N , D i s t ri ct Judge. * R A L P H B . G U Y , Jr. , C i rcui t Judge. T h is is a d isp u te o v e r w h e th e r th e re is i ns ur ance cover age f

ora mi l l i on dol l arl os s s us t ai ned bydefe ndantL avdas J ew el r y , L t d. , as t he
r es ul tof an a r m ed r obber y . T he di s t r i ctcour tent er ed s um m aryj udgm ent f o r pl ai nt i ff A ss u ra n c e C o m p a n yo f A m e ric a , fin d in g th e in su ra n c e p o licyter m s w e re u n a m b ig u o u s a n d d id notpr ovi de cove r age f

orL avdas
. Fi ndi ng t hatthe t er m s ar e ambi guous , w e vac at e the j udgm ent
o f th e d istric t co u rt. I
.No. 08-1174 2

D efe ndantL avdas J ew elry oper at es t hr ee j ew el r ys t or es i n t he D etr oi t , M i chi gan,
m e tro p o lit a n a re a . T h e b u sin e ss is ow n e d b y N ich o las L a v d a s, w h o w a s at h is s to re lo c a ted in W arr en, M i chi gan, t he eveni ng i tw as r obbed— J anuary30, 2006. T hats t or e i s l ocat ed i n a ones t or ys t r i p cent ers hoppi ng pl aza , w i t h par ki ng a r eas i n fr ontand s om e addi t i onal par ki ng behi nd t he s t or e. T he ni ght of t he robbe r y , t he j ew el r y s t or e had cl os ed t o t he publ i c at 7: 00 p. m . A l l but t w o peopl e had l eftt he s t or e byappr oxi m at el y7: 30; t hos e r emai ni ng w er e N i chol as L avdas and
em ploy ee K at hyB eauv ai s. Just befo re she l eft , L avd as had a bri ef co nv ers at i on w i t h B eauv ai s,
w ho i nd i cat ed she w as go i ng t o s pen d the evening w i t h her parent s. L avd as t hen w ent to h is
o ff ice to c lose the re m ainin g o p en saf e a n d p rep are to leav e, at w h ich tim e h e h ea rd th e sto re’s back doorcl os e. M om ent s l at er , he hear d a knock on t hat s ame door
. L avdas opened the door t o fi nd B eauva i s bei ng hel d by t hr ee gunmen w ear i ng s ki m as ks
. T he gunmen for ced thei rw ay i nto t he st ore, p u sh ing o r pul l i ng B eauv ai s w i t h them
. T heyt i ed L avd as’ s ankles and w ri st s, p u sh e d h im to th e f

lo o r, an d h it h im w ith a g u n , ca u sin g in ju rie s to h is h e a d a n d f

a c e . B e a u v a is
w as al s o bound and hi tw i t h a gun. O ne orm or e of th e g u nm en w enti nt o L avdas ’ s offi ce,
w her e l oos e di amonds and otheri t ems w er e t ake n fro m t he open s afe and s ur r oundi ng ar ea. W hen the gunmen l eftt he bui l di ng, L avdas pus hed one of t he al ar m s y s t em’s pani c but t ons and authori t i es ar ri ved w i t hin m i nu t es. L av d as in su red h is s tores thro u g h p lai n ti ff A ssu ran ce C o . o f A m erica. U sing a f o rm pr ovi ded bypl ai nt i ff, L avdas had compl et ed a J une 2005 appl i cat i on for i ns ur ance i n w hi ch he p r o v i d e d i n f

o r ma t i o n a b o u t ma n y a s p e c t s o f t h e b u s i n e s s , i n c l u d i n g d e t a i l s o f t h e a l a r m s y s t e m.No. 08-1174 3

T he al ar m s y s t em at t he l ocat i on of t he r obberycons i s t ed of a m ot i on det ect orus ed w hen no one i s i n t he s t or e, a s ur vei l l ance s y s t em, and a hol d- up al ar m s y s t em consi s t i ng of 4 hol d- up or p a n i c b u t t o n s . Un d e r “ WARR ANT I E S F OR P RO P E RT Y ON DE S CR I BE D P RE M I S E S AT A L L T I M E S W H E N Y O U A R E C L O SE D FO R B U SI N E S S , ” the appl i cat i on i ndi cat ed that 99% of t he val ue of the s t or e’ s pr oper t yw as kept i n l ocked sa fes orvaul t s . T he ans w er s gi ven byL avdas t o t he ques t i ons aff ect ed t h e p o li cypr emi um , and the pol i cypr ovi ded thatt he appl i cat i on w as a par t of t he pol i cy . I f L avdas gave fal s e ans w er s t o t he ques t i ons , t he “pol i cy [w oul d] be nul l and voi d and ther e s hal l be no cove r age. ” The pol i cyal s o pr ovi ded, undert he
c o n tra c t’s “ A d d iti o n a l C o n d iti o n s:” 2
. . . . . b. Pr ot ect i ve Safe guar ds Y ou m us tm ai nt ai n t he pr ot ect i ve s afeguar ds s t at ed b yy o u to b e in e f

f e c t at a lo c a tio n w h e n th is cover age be gan. If y ou fai l t o k eep the prot ect i ve safeg uards: ( 1) I n w or ki ng condi t i on ata l ocat i on; and (2) In operat i on w hen y ou are cl osed t o b usi ness;
c o v e ra g e to w h ich th e p ro tec tiv e sa f e g u a rd s a p p lyis a u to m a tica llysu sp e n d e d a t th a t lo c a tio n . T h is s us pens i on w i l l l as tunt il t he equi pm entors er vi ces ar e bac k i n oper at i on. L avdas m ade a n i ns ur ance cl ai m for over$1 m i l l i on. Pl ai nt i ff de ni ed the cl ai m i n a l et t er dat ed J ul y25, 2006, s t at i ng i n par tt hatNo. 08-1174 4

1
. L av d as Je w e lr y , L td., h as b rea ch ed ce rt ain w arran ti es a n d saf eg u ard e nd orsem ents of the po l i cyi ncludi ng t he p oli cyprovis i on w hich provides i n pert i nen tpartas fol l ow s: E
. A ddi t i onal C ondi t i ons 2. b. Pr ot ect i ve Safe guar ds I t em (3) i s her ebyadded: ( 3) A m i ni m um of 2 i n d ivi dual s , ei t herempl oy ees , offi cer s or o w n ers m u st be o n the p rem ises at all ti m es d u ri n g b u sine ss h o u rs and w hen op ening/ cl osi ng for bu si ness. T he l et t eral s o i nfor m ed L avdas t hat pl ai nt i ff had comm ence d a dec l ar at or yj udgm entact i on in d is tr ic t c o u rt to “ b ri n g th is m a tte r t o a ju s t a n d p ro m p t c o n c lu s io n .” Sever al m ont hs i nt o t he l i t i gat i on, L avd as soughtl eave t o fi l e a c ount er - compl ai nt
asse rt ing b rea ch o f the insu ran ce co n tr ac t. L ea v e w as g ran ted b ythe c o u rtd esp it e p lai n ti ff ’s
o bje ct i on ( i n a mot i on forr econs i der at i on) t hati thad notr ece i ved not i ce of t he def enda n t’ s
r eques t . T he p a rt i e s f

i l ed cr os s - m ot i ons fors um m aryj udgm enti n Sept ember and O ct ober2007. Pl ai nt i ff c ont ended c over age w as barr ed becaus e t w o empl oy ees / offi cer s / ow ner s w er e noton t he pr emi s es att he t i m e of the l os s , and bec aus e Lav d as fa i l ed t o m eett he al ar m s y s t em
re q u ire m e n ts w h e n th e b u sin e ss w a s c lo se d . D e f e n d a n t as se rte d in its c ro ss -m o tio n th a t it s
a l a r m s y s t e m w as oper at i onal , butt hati n anyeventpl ai nt i ff ha d w ai ved i t s r el i ance on t he pol i cy pr ovi s i on r equi r i ng t hat defe ndant keep i t s al ar m s y s t em i n oper at i on “w hen [i ti s ] cl os ed t o bus i nes s . ” The di s t r i ctcour thel d or al ar gum ent on t he mot i ons , and made i t s det er m i nat i ons
on t he record, as fol l ow s:No. 08-1174 5

I fi nd t he pol i cyt o be unam bi guous . T he st or e w as cl os i ng, beca us e notal l t he s afe s w er e l ocked. I tw as i n t he pr oces s of cl os i ng, and ther e w as onl yone per s on p re se n t. I t hi nk M r . B l ack’ s ar gum ent pr evai l s . A nd fort he r eas ons s t at ed on the r ecor d, t he Pl ai nt i ff’ s m ot i on i s gr ant ed. T he D efe ndant ’ s count er cl ai m s t hus b e c o m e m o o t. T he di s t r i ct cour t ent er ed a s um m ary w r i t t en orde r r efl ect i ng i t s deci s i on, fr om w hi ch def endant to o k th is tim e lya p p e a l. II
. Sum m ar y j udgm ent i s appr opr i at e w her e t her e ar e no genui ne i s s ues of m at er i al fac t , and th e m o v in g p a rt y is e n title d to ju d g m e n t a s a m a tte r o f la w . F ED . R. C IV . P . 5 6 (c ); C el ot ex Corp.
v . C a tre tt , 477 U
. S. 317, 322- 23 ( 1986)
. W e r evi ew the di s t r i ctcour t ’ s i nt erpr et at i on of t he i ns ur ance contr actand i t s s um m ar y j udgm ent det er m i nat i on de novo
. See D uane M gm t . C o.
v. P r udent i alI

ns . C o. , 29 F. 3d 245, 248 ( 6t h C i r . 1994)
. T he part i es agr ee thatM i chi gan l aw g o v e rn s th e in te rp re ta tio n o f th e in s u ra n c e p o lic y a t is s u e . See Hi m m el v. For d Mot orC o. , 342 F .3 d 5 9 3 , 5 9 8 (6 th C ir . 2 0 0 3 ), H ayes v. E qui t abl e Energy R es . C o. , 2 6 6 F
. 3 d 5 6 0 , 5 6 6 (6th C ir
. 2 0 0 1 ). D ef

en d an t asserts tw o rela te d claim s o n ap p ea l. F ir st, itasse rt s tha t th e d istri ct co u rt
err ed i n det er m i ni ng t hatt he endor s ement l anguage quot ed above barr ed cove r age w hen the jew e lrysto re w a s n o t “c lo sin g f o r b u sin e ss ,” b u t h a d a lre a d yc lo se d f o r b u sin e ss m o re th a n h a lf
a n h o u r e a r l i e r . I t a l t e r n a t i v e l y a s s e r t s t h a tt wo p e o p l e d i d r e ma i n o n t h e p r e mi s e s a tt h e t i me of t he i ncident
. S econ d, i t asser t s that t he d i stri ctcou rtw ronglydeterm i ned t hat i f t he b usi nessNo. 08-1174 6

Defen dant has alternativ ely sug g ested t ha t , i f

“ pr emises” is to be interp reted a s the interior, Ms. 1 Beauv ais w as “o n the premises” at the tim e of the loss, as she was pushed back into the store at the time of th e ro bb er

y . Th is argument i s no t s erio us ly p ur su ed and la ck s m erit
. Plaintiff highlights testim ony of Lav das in which he stated that he “ was j ust clo singthe store” whe n 2 the ro bbery

occ urred. D efendant’s p osition is that this testimony do es n ot co nflict w ith its argum ent th at the bu s i ne s s ha d a l r e a dy b e e n c l os e d atth e ti me of the r ob be ry and Lavda s wa s pr e par i ng t o le ave th e bu i l di ng. h a d b e e n c lo se d , the a lar m sy ste m ’s m o tio n d e tec to r, ra th e r th a n o n lyc a m e ra s a n d p a n ic bu t t on s, had t o be tur ned on. T w o ter m s re q u ire in ter p re tatio n in th e e n d o rse m e n t p la in tif f e x p re ss lyre lied o n in deny i ng cover age t o defe ndant

— “pr emi s es ” and “cl os i ng for bus i nes s . ” D efe ndanthas ar gued t hat , beca us e L avdas w as i n t he s t or e and B eauva i s w as i n t he parki ng l ot , t w o per s ons w er e on t he “pr emi s es . ” T he t er m “pr emi s es ” i s defi ned i n t he i ns ur ance contr actas “the i nt er i orof t hat 1 p a rt o f th e b u il d ing (s) w h ich y o u o cc u p yat t h e loc ati o n (s) sho w n o n the D ec larati o n s P ag e .” T he di s t r i ctcour tdi d noter ri n i nt erpr et i ng “pr emi s es ” t o m ean the i nt er i orof t he s t or e. “C l os i ng forbus i nes s , ” how ev e r , i s n e i t herdefi ned i n t he pol i cynori n r el evantM i chi gan
cas e l aw . I n m ak ing it s det er m i nat i on, t he di s t r i ctcour tcons i der ed the pol i cypr ovi s i on
r equi r i ng t w o per s ons on t he pr emi s es w hi l e the s t or e i s cl os i ng forbus i nes s , and the pr ovi s i on req u ir ing an o p era ti n g alarm sy stem w h en the st o re i s clos ed fo r b u sine ss. A t th e s u m m a ry j udgm entar gum ent, d efe ndantpoi nt ed t o a page of pl ai nt i ff’ s br i ef de s cr i bi ng t he s t or e as “cl os ed, ” w hi ch pl ai nt i ff s t at ed w as noti t s pos i t i on. Pl ai nt i ff c l ar i fi ed thati t s pos i t i on w as t hat t he s t or e w as “cl os i ng forbus i nes s ” w hen i tw as r obbed. D efe ndantas s erted the stor e w as 2
a l r e a d yc l o s e d f

o rb u s i n e s s , a n d t h a t t h e a l a r m s y s t e m w as “oper at i onal , ” as t he pani c but t ons and s ur vei l l ance s y s t em w er e i n eff ect . D efe ndantpoi nt ed outt hata per so n can’ tbe i n t heNo. 08-1174 7

Defen dant argues such a readingw ould im pose an “ abs ur d a ndim possib le con dition on the 3 policy holder, ” as it wo uld fo rbid any activity whatsoev er at the store after it is closed to cus tom ers, citing W emb elton Deve lopm ent C o. v. Trav elers In suran ce C o. , 2 06 N.W.2d 2 22 , 2 25 ( Mic h. C t. App . 1 97 3)
. Defen dant also argues on appea l that we m ay con sider “the reasonable expec tations of the insured,” citing to Vanguar

d In suran ce C

o. v. Clark

e , 47 5 N. W .2 d 48 , 52 ( M i c h. 1 99 1) , butthe rul e w a s o verrul e d b y W il ki e v. Auto -Owners Insura nce Co. , 6 64 N
. W. 2d 7 76 , 7 88 ( Mic h. 2 00 3)
. Plaintiff cites to cases such as H&S Pogue Co. v. Fid elity &C asua lty C o. of N ew York, 2 99 F. 243 4 (6th C ir. 1 924), and Boes ky B rothersTw elfth Street C orp. v . U. S. Fidelity &Guara nty C o. , 255 N. W. 3 07, 30 8 (Mi ch
. 1 93 4) , whe re co urts fo un d no in suranc e co v er ag e whe re s uf fi ci ent e m pl oy ee s or

c us to di an s w er e not “ on duty ,” none of whic h is on point here. b u i l d i n g wi t h t h e mo t i o n d e t e c t o r o n , a s a n yp e r s o n ’ s p r e s e n c e t h e r e wo u l d t r i g g e rt h e a l a r m,
a n d th a t u n d e r p lain tiff ’s r e a d in g o f th e p o licy , n o o n e , reg a rd les s o f th e p u rp o se o f

th e ir presence on t he p rem i ses ( e. g. , t o t ake i nvent or yort o per for m bui l di ng m ai nt enanc e) m aybe i n t he s t or e i f i ti s cl os ed. 3 P lain tiff d o e s n o t d isp u te th is p o in t m a d e b y d e f e n d a n t— th a t u n d e r its re a d in g , if p e o p le
a re in th e sto re w h e n it i s c lo se d , d e f e n d a n t c a n n o t m a in tain in su ra n c e c o v e ra g e . In f a c t, pl ai nt i ff’ s couns el s t at ed atar gum ent t hat “w hat y ou do i s t haty ou have t o have tw o empl oy ees p rese n t atclos ing
. Y o u set t h e a larm an d y o u w alk o u t of the s tore. A n d if y o u d o that, there ’s
cover age. ” I n r es pons e, defe ndant ’ s pos i t i on aboutt he pol i cyw as t hat

4 t here on l yhav e t o b e t w o peo ple on t he prem i ses w hen – y ou are d uri ng bu si ness ho urs, w hich w e al l agree do esn’t app l y , and w hen t he bu si ness, t he “b usi ness” is o p e n in g a n d c lo s in g . N o t th e “ p re m is e s .” I td o e s n ’ ts a yy o u h a v e t o h a v e t wo p e o p l e i n s i d e t h e p r e mi s e s a n yt i me y o u e n ter o r e x it th e p re m ise s. It d o e sn ’t sa yth a t. T h a t’s w h a t ( p lain tiff ’s c o u n se l) M r. B lac k

– th a t’s h o w M r. B lac k w a n ts t hi s pol i cyto rea d ; tha tunl es s t her e ar e tw o peopl e i n t he pr emi s es w hen the pr emi s es ar e bei ng ent er ed and e xi t ed, i f y ou don’ thave that , then there’ s no cover age.No. 08-1174 8

The d is tr ic t c ourtd id

n ot e xp re ss ly

b as e it s de ci si on

o n th e pr ovis io n co nc er

ni ngh avin gth e al arm 5 sy st em “ [i ]no pe rati on

wh en y ou are clo se d to bu si ne ss , ” but re fe re nc ed the pro v is io n inconv er sati on w ith co un se l duri ngora l ar gument. D ef en dant ’s cla im s on

a pp ea l a dd re ss th e pr ovis io n, a ss erti ngth at p la inti ff ha s w ai v ed

r el ianc e on

it a s pl ai nt if

f di d n ot inv oke th e pr ovis io n ei th er in d eny in gth e cl ai m

in it ia ll y o r in it s complai nt f

or de cl ar at ory j udgm ent . We nee d notaddr ess thi s ar gumentg iven ourfin din gs below. B utevery t hi ng i n t hi s pol i cyi s w r i t t en i n r el at i on t o t he oper at i on of t he bus i nes s . A nd by t hei r ow n admi s s i on, t he busi nes s w as n’ toper at i ng anym or e. I tw as cl os ed. I tw as 40 m i nut es ors o aft ert he end of t he oper at i ons . E verybody had gone. M r . L avdas w as doi ng s om e ot her t hi ngs . B ut t he busi nes s w as cl os ed. Y ou onl yhave t o have one per s on i n t hatpr emi s es att hatt i m e. A nd t he alar m sy st em , t hat coul d w ork w i t h a p ers on i nsi de thatprem i ses, w as operat i on al
. T heykn ew t hat. T heykn ew w hat this al arm sy st em w as. N ow , coul d t heyhave w r i t t en thi s i n a more cl earfas hi on? S ur e. B ut w hy shou l d t hey pen al i ze M r. L avd as, w ho suffered a si gn i fi cant l oss h e re , b e c a u se th e d ra f

ter s o f th is po licyd id n ’t m a k e it as c lea r a s th e yw a n t itto be? T heyw antt hi s pol i cyt o s ayy ourent i r e al ar m s y s t em, everyfac etof y our a lar m sy ste m m u st b e in o p e ra tio n a t a c e rta in tim e o r y o u m u st ha v e tw o p e o p le i ns i de the bui l di ng w hen the bui l di ng i s ent er ed and e xi t ed. N e i t h e ro f

t h o s e t h i n g s a r e s t a t e d i n t h i s p o l i c y. T hi s ar gum entw as fol l ow ed by t he court ’ s gr antof s um m aryj udgm entforpl ai nt i ff, fi ndi ng t he “s t or e” w as “cl os i ng” bec aus e notal l of t he saf es w er e l ocked, and thatonl yone per s on w as on t he p rem i ses i n v i olat i on of insurance provis i on s. 5 U nderM i chi gan l aw , i ns ur ance contr act s ar e enf or ced a ccor di ng t o t hei runambi guous te rm s . See C i t iz ens Ins. C o . v. P r o- Seal Ser v. G r oup, I

nc. , 730 N
. W
. 2d 682, 685- 86 ( M i ch. 2007) ( ci t i ng Hender

s on v. S t at e Farm F i r e & C as . C o. , 596 N
. W
. 2d 190, 193- 94 ( M i ch. 1999) )
. A n i ns ur ance contr acti s cl earand unambi guo u s if it , “how everi nar t ful l yw or ded orNo. 08-1174 9

cl um s i l yarr anged, fai r l yadmi t s of butone i nt erpretati o n . ” Far m B ur eau Mut . I ns . C o. v. Ni kke l , 596 N
. W
. 2d 915, 919 ( M i ch. 1999)
. A m bi gui t y arises in a n i ns ur ance contr actw hen t w o t er m s i r r econc i l abl yconfl i ctor“w hen i t s pr ovi sion s are ca pabl e of c onfl i ct i ng interpr et at i ons . ” Id
. “ ‘ I f t h e l a n g u a g e i s a mbi g u o u s , l o n g s t a n d i n g p r i n c i p l e s o f c o n t r actl aw
r equi r e thatt he ambi guous pr ovi s i on be cons t rued agai ns t t he dr aft er . A ppl i ed i n an i ns ur ance cont ext , t he dr aft eri s al w ay s t he i ns ur er . ’ ” W i lki e v. A ut o- O w ners I

ns . C o. , 664 N
. W
. 2d 776, 787 ( M i ch. 2003) ( quot i ng Singer v. A m . Stat es I ns. , 631 N
. W
. 2 d 3 4 , 4 1 n. 8 ( M i ch. C t . A pp. 2 0 0 2 )). W e cann ot fi nd , as t he d i stri c t courtdid, t he “closi ng for bu si ness” l ang uag e so
s t r ai ght for w ar d as t o be unam b igu o u s. U nderourr eadi ng, a r eas onabl e i nt erpr et at i on of t he contr act coul d l ead t o bot h t he di s t r i ct cour t ’ s det er m i nat i on t hatt w o peopl e w er e r equi r ed on t he pr emi s es att he t i m e of t he l os s , as w el l as a det er m i nat i on t hatt w o peopl e w er e notr equi r ed on t he pr emi s es att he t i m e of the l os s , beca us e bus i nes s hour s w er e overand the s t or e w as l ocked. B eca us e t he contr actr eas onabl ycoul d be i nt erpr et ed ei t her w ay , w e fi nd t he pr ovi s i on t o be ambi guous , and VAC ATE t he entr yof s um m aryj udgm entfort he pl ai nt i ff a nd RE M AND for furt her proceedings.No. 08-1174 10

G R I FFIN , C i r cui tJ udge, di s s ent i ng. I r es pect ful l y di s s entfr om t he maj or i t y ’ s hol di ng t hatt he pol i cyl anguage “cl os i ng for bus i nes s ” i s ambi guous . T hi s pr ovi s i on does noti nvi t e conf li cti n g i nt erpr et at i ons undert he pol i cy , nori s i t s m eani ng unfami l i aroruncomm on i n i t s cont empora r yus age. I al s o concl ude th a t th e p o licyd o e s n o t p ro v id e c o v e ra g e f o r th e lo ss b e c a u se d e f

e n d a n t b re a c h e d a w a rra n ty t hatw as m at er i al t o t he r i s k as s um ed bypl ai nt i ff A s s ur ance C om panyof A m er i ca. Pur s uantt o M i chi gan l aw , “the pr operappr oach i s t o r ead the phr as e as a w hol e, gi vi ng t he phr as e i t s comm onl yus ed meani ng. ” Hen d e rs o n v . S t a t e Fa r m Fi r e & Cas. C o. , 596 N
. W
. 2 d 1 9 0 , 1 9 5 (M ich. 19 9 9 ). “T h is ap p roa ch is co n sist en t w ith the p ara ll el rule f o r st atuto ry
c o n stru c tio n , w h ich re q u ire s th a t a ll n o n tec h n ica l w o rd s a n d p h ra se s b e d e f in e d a c c o rd in g to t he comm on and appr oved us age of t he l anguage . ” I

d. “I ns ur ance contr act s and anycover age
e x c lu sio n s f

o u n d th e re in a re g e n e ra llyc o n stru e d in f a v o r o f th e in su re d , b u t o n lya s a las t re so rt; anyambi guous t er m s ar e gi ven thei rpl ai n an d comm onl yunder s t ood m eani ngs as m uch as pos s i bl e, and an i ns ur ercannotbe held li abl e forr i s ks i tdi d notcontr actt o as s um e. ” Farm B u r e a u G e n . In s . C o . o

f Mic h . v . D u n c a n , N os . 2777531 & 277662, 2008 W L 3540203, at*1 ( M i ch. C t . A pp. A ug. 14, 2008) ( ci t i ng K l app v. U ni t ed I ns . G r oup A gency I

nc. , 663 N
. W
. 2d 4 4 7 , 4 5 4 -5 5 (M ic h . 2 0 0 3 ))
. T h e m a jo rityc o n c lu d e s tha t th e p h ra se “ c lo sin g f o r b u sin e ss ” is a m b ig u o u s b e c a u se it i nvi t es confl i ct i ng i nt erpr et at i ons , t o w i t , t hat “tw o peopl e w er e r equi r ed on t he pr emi s es att he t i m e of the l oss, and t hat t w o peo ple w ere n ot requir ed on t he p rem i ses att he ti m e of the l oss b e c a u s e b u s in e s s h o u rs w e re o v e r a n d th e s to re w a s lo c k e d .” I d is a g re e .No. 08-1174 11

“In addition to e xplicit c overag e provisions a nd exclusions . . . [

jewele r’s block] policies are 1 us ually iss ue d ba se d upo n the ins ure d’ s warranti e s o r repre se ntatio ns c on c e rn ingtheloc atio n o f all or a percentag e of theinsured proper ty in a safeor vault, or to the pe rcentag e or max imum value of inventory which may

be displayed in the store w indows.” 11 L ee R. Russ & Thomas F. Seg alla, Couch on Insuranc e § 154:67 (3d e d. 2008) (providing ove rview of relationship between wa

rra nties and r ep r e s e ntati o n s in

a p p li c ati o nf

o r c o v e r a g e in

jew e ler ’ s b lo c k

p o li c e s ) ( inter

n a l f o o tn o te s omitted). Sect i on E
. 2. b. ( 3) appea r s under t he “Prot ect i ve S afe guar ds ” sec t i on of t he pol i cy . T hat sect i on requi res t hat the insur ed take cert ai n safetyprecauti on s atdiffer ent t i m es of t he b usi ness day
. Speci fi cal l y , i tm andat es t hat at l eas t t w o agent s be on t he i ns ur ed’ s pr emi s es “atal l t i m es dur i ng bus i nes s hour s and w hen openi ng/ cl os i ng for bus i nes s . ” T her efor e, w hetherempl oy ees
ar e r eady i ng t he s t or e forcus t om er s in the m or ni ng, put t i ng aw ayj ew el r yi n t he eve ni ng, or conduct i ng cus t om ers al es , t w o agent s m us t be i n t he st or e. D i ffe r entpr ovi s i ons of t he pol i cy appl y , how ever , w hen the s t or e i s “cl os ed for bus i nes s , ” and t hey r equi r e thati t s al ar m s y s t em b e o p e ra tio n a l a n d a ll in s u re d p ro p e rt yb e s e c u re d in lo c k e d s a f e s o r v a u lts
. D efe ndantL avdas J ew el r y , L t d. arg u es on appea l t hati t s cover age w as notbarr ed by oper at i on of E. 2. b. ( 3) beca use t he s t or e w as not“cl os i ng forbus i nes s , ” butw as “cl os ed for bus i nes s . ” H ow ever , d e f e n d a n t ’ s p r o p o s a l f

o ri ns ur ance bel i es t hi s ar gum entbeca us e def endant expr es s l yw arr ant ed t hatw hen i t s s t ore w as “cl os ed forbus i nes s , ” 100 per centof i t s i ns ur ed pr oper t yw as “kept i n l ocked s afe s . ” A s t he m aj or i t y corr ect l ynot es , eac h ans w ers ubm i t t ed by defe ndanti n i t s pr opos al fori ns ur ance cover age “c o n sti tut e[d] a w arr anty ” bec aus e “[ t ] he p ri c in g o f

th e p o lic yis b a s e d o n th e s ta te m e n ts in [ th e in s u re d ’s ] p ro p o s a l.” 1No. 08-1174 12

When interpretingquestions of state law, “a state’s interme diate appe llate cour t decisions 2 arethe best authority

in the absenc e of a

ny supreme c ourt prec edent . . . .” United States v. Simpson , 520 F.3d 531, 536 ( 6th Cir. 2008). I n U s her v. St
. P aulF i r e & M ar i ne I ns . C o. , 3 3 7 N
. W
. 2 d 3 5 1 (M ich. C t. A p p . 1 9 8 3 ), 2 t he M i chi gan C o u rt o f A ppeal s cons t rued an i dent i cal w arr antypr ovi s i on cont ai ned i n a jew e ler ’s b lo c k p o licy : B yt he pl ai n lang uage of t he pol i cyand the i ncorpor at ed appl i cat i on, pl ai nt i ff w arr ant ed t hat100 per centof t he s t ock w oul d be kept i n l ocked sa fes w hen the b u sine ss w as c lose d
. In L ehr v. P rof essi on al U

nd erw ri t ers , 296 N
. W
. 843 ( 1941) q u o t e d b y Scanl on v. W

es t er n F i r e I

ns . C o. , 1 4 4 N. W
. 2 d 6 7 7 ( 1 9 6 6 ) , t h e S u p r e me C o u rt h e ld th a t “[ a n ] in su ra n c e c o m p a n ym a ylim it th e risk s it a ss u m e s a n d f ix its prem i um s accordi ng l y . T he li abil i t yw as l i m i t ed in t he p oli cy . T o h old ot herw i se w oul d be t o w r i t e a new cont r act for t he part i es . ” D efe ndanti ns ur eras s um ed the ri sk on l yfor pl ai nti ff’s st ock w hich w as k ept i n l ock ed safes w hen t he b usi ness w as cl os ed. I t i s undi s put ed t hat t he onl y j ew el r y t aken dur i ng t he bur gl aryw as th a t co n tain e d in d isp lay ca se s o u tsid e o f th e sa f e s. T h e b re a c h o f

th e w a rra n ty w as m at er i al t o t he r i s k as s um ed by defe ndant
. T he l ow er cour tpr oper l ygr ant ed s u m m a ry ju d g m e n t in f a v o r o f d e f e n d a n t o n th is g ro u n d
. . . . Id

. at 3 5 2
. I n t he pre sen tcas e, t he pol i cyi ns t ruct s defe ndantt hat“w hen [i t ] [i s ] cl os ed for b u sin e ss ,” th e “ m in im u m p e rc e n tag e b yv a lu e o f p ro p e rtyk e p t in lo c k e d sa f e s o r v a u lts
. . . is 9 9 % ” a n d th e “ m in im u m p e rc e n tag e o f v a lu e o f p ro p e rtyk e p t in o th e r lo c k e d sa f e s o r v a u lts

. . . i s 1%
. ” T hus , defe ndantexpr es s l yw arr ant ed thatw hen i tw as “cl os ed forbus i nes s , ” 100 per cent of t he i ns ur ed pr oper ty w oul d be kept i n l ocked s afe s orvaul t s . I ti s uncont es t ed byt he part i es t hat t he i nsured propert yw as st olen from an u nlocked safe i n M r. L avd as’ s office. T hu s,No. 08-1174 13

This court “may aff

irm on any grounds s upported by the record even if different from the 3 rea sons of the district court.” Dixon v. Clem , 492 F.3d 665, 673 (6th Cir. 2007) (c itation omitted). even i f t he s t or e w as “cl os ed forbus i nes s ” as defe ndantcont ends , and as s um i ng ar guendo t hat i t s al arm sy st em w as ful l yop erat i on al , t he p oli cy st i l l precl ud es cov erage for defen dan t ’s l oss. 3 I agr ee w i t h t he maj or i t yopi ni on i ns ofaras i tconcl udes t hatt he pol i cydoes nots peci fy
w h e th e r m o re th a n o n e a g e n t is re q u ir e d o n th e p re m is e s w h e n th e s to re is “ c lo s e d f o r b u s in e s s ,” i
. e. , w hen busi nes s hour s ar e overand the s t or e i s l ocked. H ow ever , t hi s om i s s i on, s t andi ng al one, does notr endert he pol i cy ’ s t er m s ambi guous . T he pol i cy ’ s r equi r ement t hatal l i ns ur ed jew elry m us tbe cont ai ned i n l ocked s afe s w hen the s t or e i s cl os ed w oul d r endert he pol i cy ’s securi t yprovis i on requi ri ng t he p res ence o f t w o ag ents un necessary . In short , t here i s a d ec rea sed ri sk o f lo ss w h en the i n su red p rop erty is un d er loc k an d k ey . M o reo v er, a co n tr ary i nt erpr et at i on, s uch as t he one a dvance d bydefe ndant , w oul d hol d pl ai nt i ff l i abl e forr i s ks t hat it d id n o t c o n tr a c t to a s s u m e . De f e n d a n tc o n t e n d s t h a ta n i n t e rp r e t a t i o n o f t h e p o l i c yt h a tr e q u i r e s t h e p r e s e n c e o f t wo ag en ts i n the s tore a t all ti m es to m aintain c o v era g e w o u ld p rod u ce an ab su rd re su lt
. H o w ev er, je w e le r’ s b lo c k in s u ra n c e d if f e rs f ro m m o s t o th e r tr a d itio n a l f o rm s o f p ro p e rt y in s u ra n c e . See 1 1 L ee R
. R u ss & T h o m a s F
. S eg all a, C o u ch o n Insu ran ce § 1 5 4 :67 (3d ed
. 2 0 0 8 ). U n d er a typ ica l p ro p e rtyin su ra n c e c o n tra c t, ca lled a “ n a m e d p e ril” p o licy , an in su re r a g re e s to ind em n ifyit s insu red fo r l o sses resu lt ing fro m ce rt ain risks o f l o s s o r da m ag e w h ich a re
s p e c if ic a lly e n u m e ra te d w ith in th e p ro v is io n s o f th e p o lic y . I d. In c o n tr ast, u n d er a jew eler’s b lo c k p o lic y , w h ic h is a n “ a ll- ri s k s ” p o lic y , any l os s ordamage t o j ew el r ycan be i ns ur ed,No. 08-1174 14

s u b je c t to c e r t a i n e x c e p t i o n s . I d. T h u s, re q u irin g th e p re se n c e o f tw o a g e n ts a s a se c u rity pr eca ut i on w hen, for exampl e, one m i l l i on dol l ar s w or t h of l oos e di amonds i s kepti n an open
s a f e , d o e s n o t y i e l d a n a b s u r d r e s u l t i n l i g h t o f t h e “ a l l
- r i s k s ” c o v e r a g e p r o v i d e d by pl ai nt i ff. I d. N e x t, al th o u g h M ic h ig a n c o u rt s h a v e y e t to in te rp re t th e p h ra s e “ c lo s in g f o r b u s in e s s ,” a l ack of pr ece dent on t hi s poi nt does not r emove t hi s phr as e fr om i t s cont empora r yus age. T he phr as e “c l os i ng forbus i nes s ” i m pl i es an ac t i ve pr oces s , nam el y , t he t as ks per for m ed by empl oy ees aft er nor m al bus i nes s hour s ar e over but befor e t he st or e i s vaca t ed fort he eve ni ng. D efe ndant ’ s m anage r , C ynt hi a Low e, t es t i fi ed thatdefe ndanthad a s etpr ocedur e forcl os i ng t he s t or e, w hi ch i nvol ved, am o n g o ther thi ngs , pl aci ng t he j ew el r yi n t he s afe s , l ocki ng t he
s afe s , “doubl e- chec ki ng every t hi ng, ” mak[i ng] s ur e that every t hi ng w as l ocked, ” s et t i ng t he al ar m s , and “a l l w al k[i ng] out t ogether
. ” D efe ndant ’ s ow neral s o t es t i fi ed thathe w as “cl os i ng th e s to re ” a t th e tim e o f th e ro b b e ry. T i t l e 12, Sect i on 568. 3 of t he C ode of Feder al R egul at i ons w as pr om u lgated p u r s uant t o t he B ank Pr ot ect i on A ctof 1968, 12 U
. S. C
. § 1881-84 (1988). T he B ank Pr ot ect i on A ct
re q u ire s th e O f

f ice o f T h rif t S u p e rv isio n (a b ra n c h o f th e D e p a rtm e n t o f

th e T r e a s u r y ) to
e s t a b l i s h m i n i m u m s a f

e t y s t a n d a r d s f

o rb a n k s a n d s a v i n g s a n d l o a n i n s t i tu t i o n s . S p e c i f i c a l l y, i t“r equi r es eac h s avi ngs as s oci at i on t o adoptappr op ri ate s ecur i t ypr ocedur es t o di s cour age
r obber i es , bur gl ar i es , and l ar ceni es and t o as s i s t i n t he i dent i fi cat i on and pr os ecut i on of per s ons
w ho comm i ts uch ac t s . ” 12 C
. F. R
. § 568. 1( a)
. Sect i on 568. 3 r equi r es , among ot hert hi ngs , t hatNo. 08-1174 15

ea ch b an k “[ e]stab li sh p roc ed u res f o r op ening an d closi ng f or bu si ness and for t he s afe keepi ng of al l curr ency , negot i abl e sec ur i t i es , and si m i l arval uabl es atal l t i m es . ” I d. (em p h asis ad d ed ). A l t hough t he B PA does notdefi ne “ope ni ng and cl os i ng fo r b u sine s s , ” i t s us e of that p h rase alon g side the w o rd “sa fe k ee p ing ” de m o n str ates th e fe d era l g o v ern m en t’ s acknow l edgment of t he part i cul arvul ner abi l i t y of banks dur i ng t hi s t i m e per i od. T he B PA t hus p rov ide s p e rs u a s iv e a u th o ri ty th a t b u s in e s s e s d e a lin g in v a lu a b le s s h o u ld b e tak ing the n ec essa ry p re c a u tio n s to s a f

e g u a rd s u c h p r o p e rt yw h e n th e ya re “ o p e n in g a n d c lo s in g f o r b u s in e s s .” B ecause M r. L avd as w as al on e and st i l l “i n th e p ro c e ss of cl osi ng ” t he st ore w hen t he loss
occurr ed, defe ndantdi d nott ake the r equi r ed pr eca ut i ons t o s ecur e i t s jew elryfr om l os s , and its c o v e ra g e is th e re f

o re b a rr e d u n d e r s e c tio n E .2 .b .(3 ) o f th e p o lic y . F o r t h e s e re a s o n s , I w o u ld a f f ir m th e ju d g m e n t o f

th e d is tr ic t c o u rt .